Increasingly, the Gen Y, also known as the millennials, are getting involved in the future of Australia’s finance industry through investing in start-ups that are emerging in the local market.
This is partly due to these new businesses aggressively targeting this younger market, as well as basing their value propositions around the unique needs and expectations of millennials entering the workforce.
Of course early stage startups are all about shaping the future, so their products will be based around their future users, but why are millennials taking so much interest in the finance industry?
As both a millennial and a FinTech founder myself, I have found that Gen Y professionals are more interested in putting their money towards businesses and products that they believe they will benefit from in the near future, as opposed to other generations who are more inclined to invest in safer options.
The statistics from our recent launch campaign gave us some interesting insights into Gen Y and why they may turn to FinTech for their first investment, with 60 per cent stating they were first time investors.
Millennials grew up with an evolving media landscape, and are ready to adapt to change, whether that be in regards to their social media platforms or their banking provider. They are already consuming FinTech products everyday, and are equipped to try new apps. Since they are familiar with the technology space, they are comfortable with the offerings of different startups and understand where exactly their investments will be going.
Younger generations are becoming increasingly aware about banking alternatives that go against the big four banks. They are demanding enhanced banking experience with seamless and effortless payments high on their priority list. They demand and expect “instant” with their money no matter where they are in the world, be it payments, records, notifications or customer service. They want to support and invest in these smaller companies that offer them these elements, and have no hidden fees. Millennials are at the stage in their lives when they are starting to think about their future, and they want to get the best deal wherever possible.
As mentioned earlier, millennials are the future users of new financial platforms. They are ready for change and don’t have the same loyalty to their current banking providers as older generations, who are less likely to make the switch. The challenge for Fintechs who secure millennial users is to reward loyalty of these consumers, which is now a base-line expectation of the the cohort. In our recent EOI campaign, 75 per cent of investors stated that the reason they were investing was that they want to use our app themselves, highlighting that young adults want to invest in the products they know they will use, and that will ultimately make their financial lives that little bit easier.
Sam Brown, Founder and Director, Pelikin